[Federal Register Volume 79, Number 62 (Tuesday, April 1, 2014)]
[Proposed Rules]
[Pages 18211-18212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-07015]

Proposed Rules
                                                Federal Register

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.


Federal Register / Vol. 79, No. 62 / Tuesday, April 1, 2014 / 
Proposed Rules

[[Page 18211]]


Agricultural Marketing Service

7 CFR Part 28

RIN 0581-AD35

User Fees for 2014 Crop Cotton Classification Services to Growers

AGENCY: Agricultural Marketing Service, USDA.

ACTION: Proposed rule.


SUMMARY: The Agricultural Marketing Service (AMS) is proposing to 
maintain user fees for cotton producers for 2014 crop cotton 
classification services under the Cotton Statistics and Estimates Act 
at the same level as in 2013. These fees are also authorized under the 
Cotton Standards Act of 1923. The 2013 crop user fee was $2.20 per 
bale, and AMS proposes to continue the fee for the 2014 cotton crop at 
that same level. This proposed fee and the existing reserve are 
sufficient to cover the costs of providing classification services for 
the 2014 crop, including costs for administration and supervision.

DATES: Comments must be received on or before April 16, 2014.

ADDRESSES: Interested persons may comment on the proposed rule using 
the following procedures:
     Internet: http://www.regulations.gov.
     Mail: Comments may be submitted by mail to: Darryl 
Earnest, Deputy Administrator, Cotton & Tobacco Programs, AMS, USDA, 
3275 Appling Road, Room 11, Memphis, TN 38133. Comments should be 
submitted in triplicate. All comments should reference the docket 
number and the date and the page of this issue of the Federal Register. 
All comments will be available for public inspection during regular 
business hours at Cotton & Tobacco Program, AMS, USDA, 3275 Appling 
Road, Memphis, TN 38133.

FOR FURTHER INFORMATION CONTACT: Darryl Earnest, Deputy Administrator, 
Cotton & Tobacco Programs, AMS, USDA, 3275 Appling Road, Room 11, 
Memphis, TN 38133. Telephone (901) 384-3060, facsimile (901) 384-3021, 
or email darryl.earnest@ams.usda.gov.


Executive Order 12866 and Executive Order 13563

    Executive Orders 12866 and 13563 direct agencies to access all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health, and safety effects, distributive impacts and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
This action has been designated as a ``non-significant regulatory 
action'' under Sec.  3(f) of Executive Order 12866 and therefore has 
not been reviewed by the Office of Management and Budget (OMB).

Executive Order 13175

    This action has been reviewed in accordance with the requirements 
of Executive Order 13175, Consultation and Coordination with Indian 
Tribal Governments. The review reveals that this regulation would not 
have substantial and direct effects on Tribal governments and would not 
have significant Tribal implications.

Executive Order 12988

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. It is not intended to have retroactive effect. 
There are no administrative procedures that must be exhausted prior to 
any judicial challenge to the provisions of this rule.

Regulatory Flexibility Act

    Pursuant to requirements set forth in the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601-612), AMS has considered the economic impact of 
this action on small entities and has determined that its 
implementation will not have a significant economic impact on a 
substantial number of small businesses.
    The purpose of the RFA is to fit regulatory actions to the scale of 
businesses subject to such actions so that small businesses will not be 
disproportionately burdened. There are an estimated 20,000 cotton 
growers in the U.S. who voluntarily use the AMS cotton classing 
services annually, and the majority of these cotton growers are small 
business entities under the criteria established by the Small Business 
Administration (13 CFR 121.201). Small business entities that are 
growers in the U.S. cotton industry are defined as having annual 
receipts less than $750 thousand. Continuing the user fee at the 2013 
crop level as stated will not significantly affect small businesses as 
defined in the RFA because:
    (1) The fee represents a very small portion of the cost per-unit 
currently borne by those entities utilizing the services. (The 2013 
user fee for classification services was $2.20 per bale; the fee for 
the 2014 crop would be maintained at $2.20 per bale; the 2014 crop is 
estimated at 13,400,000 bales);
    (2) The fee for services will not affect competition in the 
    (3) The use of classification services is voluntary. For the 2013 
crop, approximately 12,600,000 bales were produced; and, almost all of 
these bales were voluntarily submitted by growers for the 
classification service; and
    (4) Based on the average price paid to growers for cotton from the 
2012 crop of 0.7477 cents per pound, 500 pound bales of cotton are 
worth an average of $373.85 each. The proposed user fee for 
classification services, $2.20 per bale, is a little more than one half 
percent of the value of an average bale of cotton.

Paperwork Reduction Act

    In compliance with OMB regulations (5 CFR part 1320), which 
implement the Paperwork Reduction Act (PRA) (44 U.S.C. 3501), the 
information collection requirements contained in the provisions to be 
amended by this proposed rule are currently approved by OMB and 
assigned OMB control number 0581-0008, Cotton Classing, Testing, And 

Fees for Classification Under the Cotton Statistics and Estimates Act 
of 1927

    This proposed rule would maintain the 2013 user fee of $2.20 per 
bale as the fee charged producers for the classification of the 2014 
cotton crop. The 2014 user fee was set in accordance to requirements in 
the Cotton Statistics and Estimates Act as amended by the provisions in 
the 2008 Farm Bill [Food, Conservation, and Energy Act of 2008 (Sec. 
14201 3a)]. Amendments based on

[[Page 18212]]

Section 14201 of the 2008 Farm Bill provided that: (1) the Secretary 
shall make available cotton classification services to producers of 
cotton, and provide for the collection of classification fees from 
participating producers or agents that voluntarily agree to collect and 
remit the fees on behalf of the producers; (2) classification fees 
collected and the proceeds from the sales of samples submitted for 
classification shall, to the extent practicable, be used to pay the 
cost of the services provided, including administrative and supervisory 
costs; (3) the Secretary shall announce a uniform classification fee 
and any applicable surcharge for classification services not later than 
June 1 of the year in which the fee applies; and (4) in establishing 
the amount of fees under this section, the Secretary shall consult with 
representatives of the United States cotton industry. At pages 313-314, 
the Joint Explanatory Statement of the committee of conference for 
section 14201 stated the expectation that the cotton classification fee 
would continue to be a basic, uniform fee per bale fee as determined 
necessary to maintain cost-effective cotton classification service. 
Further, in consulting with the cotton industry, the Secretary should 
demonstrate the level of fees necessary to maintain effective cotton 
classification services and provide the Department of Agriculture with 
an adequate operating reserve, while also working to limit adjustments 
in the year-to-year fee.
    Under the provisions the Cotton Statistics and Estimates Act as 
amended by the section 14201 of the 2008 Farm Bill, a user fee (dollar 
amount per bale classed) is proposed for the 2014 cotton crop that, 
when combined with other sources of revenue, will result in projected 
revenues sufficient to reasonably cover budgeted costs--adjusted for 
inflation--and allow for adequate operating reserves to be maintained. 
Costs considered in this method include salaries, costs of equipment 
and supplies, and other overhead costs, such as facility costs and 
costs for administration and supervision. In addition to covering 
expected costs, the user fee is set such that projected revenues will 
generate an operating reserve adequate to effectively manage 
uncertainties related to crop size and cash-flow timing. Furthermore, 
the operating reserve is expected to meet minimum reserve requirements 
set by the Agricultural Marketing Service, which require maintenance of 
a reserve fund amount equal to at least four months of projected 
operating costs.
    The user fee proposed to be charged cotton producers for cotton 
classification in 2014 is $2.20 per bale, which is the same fee charged 
for the 2013 crop. This fee is based on the preseason projection that 
13,400,000 bales will be classed by the United States Department of 
Agriculture during the 2014 crop year.
    Accordingly, Sec.  28.909, paragraph (b) would reflect the 
continuation of the cotton classification fee at $2.20 per bale.
    As provided for in the 1987 Act, a 5 cent per bale discount would 
continue to be applied to voluntary centralized billing and collecting 
agents as specified in Sec.  28.909(c).
    Growers or their designated agents receiving classification data 
would continue to incur no additional fees if classification data is 
requested only once. The fee for each additional retrieval of 
classification data in Sec.  28.910 would remain at 5 cents per bale. 
The fee in Sec.  28.910(b) for an owner receiving classification data 
from the National Database would remain at 5 cents per bale, and the 
minimum charge of $5.00 for services provided per monthly billing 
period would remain the same. The provisions of Sec.  28.910(c) 
concerning the fee for new classification memoranda issued from the 
National Database for the business convenience of an owner without 
reclassification of the cotton will remain the same at 15 cents per 
bale or a minimum of $5.00 per sheet.
    The fee for review classification in Sec.  28.911 would be 
maintained at $2.20 per bale.
    The fee for returning samples after classification in Sec.  28.911 
would remain at 50 cents per sample.
    A 15-day comment period is provided for public comments. This 
period is appropriate because user fees are not changing and it is 
anticipated that the proposed fees, if adopted, would be made effective 
for the 2014 cotton crop on July 1, 2014.

List of Subjects in 7 CFR Part 28

    Administrative practice and procedure, Cotton, Cotton samples, 
Grades, Market news, Reporting and record keeping requirements, 
Standards, Staples, Testing, Warehouses.

    For the reasons set forth in the preamble, 7 CFR part 28 is 
proposed to be amended to read as follows:

PART 28--[Amended]

1. The authority citation for 7 CFR part 28, Subpart D, continues to 
read as follows:

    Authority:  7 U.S.C. 471-476.

2. In Sec.  28.909, paragraph (b) is revised to read as follows:

Sec.  28.909  Costs.

* * * * *
    (b) The cost of High Volume Instrument (HVI) cotton classification 
service to producers is $2.20 per bale.
* * * * *
3. In Sec.  28.911, the last sentence of paragraph (a) is revised to 
read as follows:

Sec.  28.911  Review classification.

    (a) * * * The fee for review classification is $2.20 per bale.
* * * * *

    Dated: March 18, 2014.
Rex A. Barnes,
Associate Administrator, Agricultural Marketing Service.
[FR Doc. 2014-07015 Filed 3-31-14; 8:45 am]